Effective online promotions reach out to two segments, says Forrester

The bursting of the dot-com bubble doesn’t mean that online promotions are any less popular with online consumers, according to a new report from Forrester Research. But it does require online merchants to be more targeted in the execution of promotional strategies, adopting a two-tier approach to shoppers.

Promotion seekers, representing about 53% of online consumers, will go to great lengths to find a deal, buy most of their products on sale, and will shop new sites because of promotions, according to Forrester. They’re frequent buyers, making an average 16.5 online purchases per year and spending almost $2,000 online annually. Heavy offline shoppers as well, they’re interested in forming lasting relationships with retailers. Promotion shunners, as defined by Forrester, are a skeptical bunch-–they believe most promotions are for products they don’t need, consider promotions manipulative, and don’t have time to surf the web for sales. Though they do buy online, they buy less than seekers, averaging 11.2 purchases per year. They’re critical of retail marketing in general and unconvinced about the merits of online personalization technology.

Retailers need two approaches to succeed with the two groups, says Chris Kelley, Forrester analyst. Retailers can attract online promotion seekers with little effort by cultivating relationships with coupon sites, setting minimum order sizes for promotion--a proven strategy with this group for upping order size--and offering first-time buyer sales. Shunners, on the other hand, must have the promotion dropped directly in their laps, respond better to promotions based on their personal data that are more likely to be tailored to their specific needs. Shunners also are more responsive to promotions that offer immediate savings, Kelley adds.